The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Jennifer Saba

NEW YORK, Feb 4 (Reuters Breakingviews) - The TikTok ban-or-sell drama is an algorithm stuck in a loop. First U.S. President Donald Trump, then his successor Joe Biden, pushed to ban the social media app amid warnings that its ties to China pose a national security threat. Both pulled back from the brink, even if a law mandating its sale or shutdown remains on the books. Now, with Trump back in charge, a long list of mooted, familiar buyers is re-emerging. The simplest way to scroll past this glitch in the feed is to spin TikTok off.

Trump has given Chinese parent ByteDance a reprieve to figure out a solution. The value up for grabs in TikTok’s 170 million U.S. users has set off a scramble. The oddball list of potential buyers includes tech giants Microsoft MSFT.O and Oracle ORCL.N, billionaire Frank McCourt, YouTube sensation Mr. Beast, former Treasury Secretary Steve Mnuchin, social media rival and government efficiency overlord Elon Musk – and even Uncle Sam. Trump raised the latter idea again on Monday, when he signed an executive order to create a U.S. sovereign wealth fund that he posited could own a piece of TikTok.

The excitement obscures real obstacles. Aside from whether ByteDance would accept a sale, instead of simply nixing TikTok, Chinese export controls might prevent valuable intellectual property – like the addiction-forming code that spits out the content on users’ feeds – from being relinquished.

Still, the White House is working on a deal that includes the technology, NPR reported. There’s one easy blueprint: ByteDance’s own structure. The privately held $300 billion tech giant is 60% owned by international institutional investors, like U.S. firms General Atlantic and BlackRock BLK.N. Employees have a 20% stake. Founder Zhang Yiming holds the rest, but with special voting rights that give him control.

A spun-out TikTok could copy this structure. The group of investors including the asset manager led by Larry Fink would receive their 60% on a one-for-one basis. Employees get their one-fifth share. The rub is the controlling founder stake.

Assume that TikTok’s intellectual property is included in a deal. By applying the valuation multiple ascribed to peers like Meta Platforms META.O and Snap SNAP.N to its $20 billion of revenue estimated by Bernstein analysts, the enterprise would be worth about $100 billion. Buying Zhang out of his voting rights might command a premium, say 30%. In that case, the founding stake would reap $26 billion.

This could be tweaked in various ways, allowing ByteDance to keep a bigger toehold. But it would fit the mold suggested by General Atlantic CEO and ByteDance board member Bill Ford in January, when he said the company is exploring options including a change of control to save TikTok. Doing so would finally allow it to serve up something new.

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CONTEXT NEWS

President Donald Trump wrote on social media site Truth Social on Feb. 3 that there was “great interest” in TikTok, the short-form video app owned by China’s ByteDance. Trump signed an executive order after taking office that sought to delay the effects of a law effectively mandating that the app either be sold or shut down.

On the same day, the president signed an executive order to create a U.S. sovereign wealth fund, saying it could potentially buy TikTok.

(Editing by Jonathan Guilford and Pranav Kiran)

((For previous columns by the author, Reuters customers can click on SABA/jennifer.saba@thomsonreuters.com))